Pres. Robert Mugabe’s consistent refusal in 1997 to respond to external pressures to change policies that he professed to be in the interests of the black population of his country made potential foreign donors cautious and caused would-be foreign investors to hesitate. At the same time, Mugabe’s frequently reiterated threat to acquire mainly white-owned land without compensating the owners, except where improvements had clearly been made, aroused disquiet among the nation’s white farmers. On November 28 the government published a list of 1,503 mostly white-owned commercial farms that would be forcibly purchased. The owners had until December 28 to appeal the ruling.

Typical of the president’s stance was his announcement in February of a new tariff structure that gave increased protection to local industry. This was in clear conflict with the World Bank policy on trade liberalization. Then, in March, a bill was published legalizing affirmative action to permit discrimination that would benefit "persons disadvantaged by previous discrimination." Later in the month Mugabe stated that recent reforms had left the country "ripe for investment" and that the government would continue to play an important role in the choice of foreign partners and would ensure that the privatization program was used to encourage black entrepreneurs so as to redress the legacy of minority rule.

These moves failed to harmonize with allegations that senior party officials, including the president’s brother-in-law, had lied in order to receive substantial benefits in compensation for nonexistent wounds said to have been received in fighting for black majority rule. In April evidence in court revealed that Mugabe’s wife and others had illegally borrowed millions of dollars from a finance fund set up by the U.S. to help house the urban poor of Zimbabwe.

An outbreak of strikes induced the government to offer pay increases of more than 30% to public-service employees in July. This forced other employers, who had hoped to keep wage increases to the level of inflation, to concede similar pay awards. The strain that the increases imposed on the finance minister’s attempts to balance the budget was considerable, yet the World Bank claimed in August to have seen sufficient improvement in Zimbabwe’s fiscal situation to justify the renewal of financial support suspended in 1995.

Mugabe soon caused the bank to reverse its decision. The revelation in March of bogus compensation claims for war wounds had led to the suspension of compensation payments. This was followed by increasingly noisy protests from genuine guerrilla veterans that culminated in the disruption of a ceremony marking Heroes’ Day in August. In the face of protests from the minister of finance, Mugabe offered a generous package of payments and other benefits to all veterans of the freedom struggle.

The World Bank’s subsequent decision in October to delay disbursement of its aid was a severe setback, but the ever-resilient Mugabe seized the opportunity provided by his visit to the U.K. to attend the Commonwealth Heads of Government Meeting later in the month to ask the British government to provide compensation to the white farmers whose land he proposed to acquire for redistribution among the black population. Britain, however, refused to pay, stating that the farmers were now Zimbabwean citizens.

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